Reciprocity and Unveiling in Two-sided Reputation Systems: Evidence from an Experiment on Airbnb

56 Pages Posted: 27 Jun 2018 Last revised: 29 Apr 2021

See all articles by Andrey Fradkin

Andrey Fradkin

Boston University - Questrom School of Business

Elena Grewal

Airbnb

David Holtz

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: April 29, 2021

Abstract

Reputation systems are used by nearly every digital marketplace, but designs vary and the effects of these designs are not well understood. We use a large-scale experiment on Airbnb to study the causal effects of one particular design choice — the timing with which feedback by one user about another is revealed on the platform. Feedback was hidden until both parties submitted a review in the treatment group and was revealed immediately after submission in the control group. The treatment stimulated more reviewing in total. This is due to users' curiosity about what their counterparty wrote and/or the desire to have feedback visible to other users. We also show that the treatment reduced retaliation and reciprocation in feedback and led to lower ratings as a result. The effects of the policy on feedback did not translate into reduced adverse selection on the platform.

Keywords: Reputation, Market Design, Digital Marketplaces, Field Experiments, Reciprocity, Information, Product Quality

JEL Classification: C93, D47, L14, L86, D8, L18, L83, M31

Suggested Citation

Fradkin, Andrey and Grewal, Elena and Holtz, David, Reciprocity and Unveiling in Two-sided Reputation Systems: Evidence from an Experiment on Airbnb (April 29, 2021). Available at SSRN: https://ssrn.com/abstract=2939064 or http://dx.doi.org/10.2139/ssrn.2939064

Andrey Fradkin (Contact Author)

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

HOME PAGE: http://www.andreyfradkin.com

Elena Grewal

Airbnb ( email )

888 Brannan St
San Francisco, CA 94103
United States

David Holtz

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
Cambridge, MA 02142
United States

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